Macatawa Bank also posted solid growth in annual net income, although a reduction in mortgage financing as long-term interest rates inched upward stemmed earnings growth in the fourth quarter.
Holland-based Macatawa Bank grew assets, loans and deposits by about 20 percent each during what Chairman and Chief Executive Office Ben Smith III called a “pretty tough year” economically in West Michigan. Many signs now point to improved economic fortunes ahead for the region, paving the way for continued strong growth rates, Smith told brokerage analysts recently.
“Things are starting to look a lot better around here. It’s not as sunshiny as we’d like but things are improving,” he said during a Jan. 20 conference call to discuss the bank’s fourth-quarter results. “We think things are past the worst part. We don’t expect a real fast rebound, but we do expect things to be better.”
Macatawa Bank late last month reported annual net income of $11.78 million for 2003, or $1.39 per diluted share, up 21.5 percent from the $9.53 million, or $1.21 per diluted share, a year earlier.
Fourth quarter net income grew just 2 percent, from $2.91 million, or 35 cents per share, a year ago to $2.97 million, or 36 cents per share.
Dampening earnings growth was a decrease in one-time fees associated with residential mortgages that led to a $588,000 reduction in gains on the sale of mortgage loans during the fourth quarter. The corporation sought to offset the decline by asset growth that generated higher interest income and containing costs.
Chief Financial Officer Jan Swets sees the situation with one-time fee income remaining an issue in subsequent periods.
“It may be persistent for a couple of quarters,” Swets said.
Macatawa Bank’s assets grew 7.8 percent for the quarter and 19.1 percent for the year, finishing 2003 at $1.4 billion. Deposits were up 11.8 percent for the quarter, thanks to several large business accounts landed late in the period, and 18.9 percent for the year, to $1.1 billion.
Total loans grew by 6.3 percent in the fourth quarter, or $68 million, and 20.3 percent on the year, ending 2003 at $1.15 billion.
For 2004, Macatawa Bank has made further penetration of the Grand Rapids-area market a top priority, Smith said, with three new branch offices scheduled to open, including a Walker location in the first quarter.